5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up
5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up
5. How should accounting fees for acquisition be treated? A. Expensed in the period of acquisition B. Capitalized as part of acquisition cost C. Deferred and amortized D. Deferred until the company is disposed of or wound-up
5. How should accounting fees for acquisition be treated?
A. Expensed in the period of acquisition
B. Capitalized as part of acquisition cost
C. Deferred and amortized
D. Deferred until the company is disposed of or wound-up
6.The excess of the price paid over the fair value of the net identifiable assets acquired should be recognized as
A. Goodwill to be amortized periodically for 20 yearS.
B. Expenses immediately
C. Goodwill not subject to amortization but subject to impairment
D. Goodwill to be amortized for 40 years
7.Under PFRS 3 (Business Combinations)
A. Both direct and indirect costs are to be capitalized
B. Both direct and indirect costs are to be expensed
C. Direct costs are to be capitalized and indirect costs are to be expensed
D. Indirect costs are to be capitalized and direct costs are to be expensed
Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).
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